美国吸引中国散户投资美国股市

henry

Chinese Investors to See
More Ways to U.S. Funds
By JAMES T. AREDDY
January 29, 2008 2:29 p.m.

SHANGHAI, China -- As China's stock market slumps from its recent dizzying heights, investors in the world's most populous nation increasingly have the option to move money into shares traded overseas, including the U.S.

Even so, don't expect them to inflate the Dow Jones Industrial Average into a China-style bubble soon.

In the latest move to give Chinese investors access to the U.S. market, the U.S. Securities and Exchange Commission is expected to sign a memorandum of understanding in the next several days with the China Banking Regulatory Commission that will allow banks in China to develop U.S. stock mutual funds for their clients, according to a person familiar with the situation.

The banking agreement is one facet of a little-noticed trend over the past 18 months: The door has swung open for ordinary Chinese people to invest more of their $2.4 trillion in savings overseas. U.S. Treasury Secretary Henry Paulson has been urging China to ease its capital controls and permit the outward flows. Plans for Chinese money to hit U.S. markets were hatched during meetings last May and December of the Strategic Economic Dialogue, a bilateral forum Mr. Paulson helped launch.


Already, brokerages, banks and fund companies in China are pitching to the country's investors a fast-expanding array of mutual funds and other products that invest in, or reflect values of, world-wide stock and bond markets. Dubbed QDII, for qualified domestic international investor, the program marks the first legal channel for China's investors to put money in foreign financial markets.

Until about mid-2006, tough capital controls made it almost impossible for individuals in China to convert yuan into U.S. dollars and other foreign currencies, much less invest in overseas stock and bond markets. Now, individuals can convert yuan worth up to $50,000 per year, reflecting how Beijing is eager to offset continued inflows into China by sanctioning more outflows.

HSBC Holdings PLC estimates QDII products worth over $50 billion have already been approved -- not far off the roughly $66 billion earmarked for overseas allocation by Beijing's much-watched sovereign fund China Investment Corp., which last year bought into Blackstone Group Ltd. and Morgan Stanley.

"You are talking about real international access for retail investors in China," says Peter Alexander, principal of Z-Ben Advisors Ltd., a Shanghai consultancy on China's fund-management industry.

The pending U.S.-China agreement for banks modestly expands the existing channels of outside investment. Under it, banks in China will be permitted to design their own U.S. stock funds -- instead of selling products on behalf of other firms like mutual-fund companies. Banks are important because their branches are the primary platform for distributing financial products in China.

The SEC didn't immediately respond to a request for comment. A Chinese bank-regulatory-agency spokesman in Beijing referred to past statements the agency has made that it has already penned similar agreements with counterparts in Hong Kong, Singapore and the U.K., and will set them soon with the U.S., Germany and Japan.

One hitch is frustrating the QDII industry: Individual Chinese don't yet show much enthusiasm for global investing -- in the U.S. or anywhere else. Virtually all of the products introduced so far have been undersubscribed, and many have declined in value.

Quite simply, investors in China don't think the rest of the world looks very attractive right now.

The caution reflects the kind of worries about a U.S. recession that have caused global market turmoil. Plus, confidence hasn't completely evaporated from the local stock market -- even with the Shanghai Composite Index into bear-market territory with a 27% loss since October's peak.

But a particular obstacle to faster development of the QDII program is China's currency, and specifically the expectations that the yuan will strengthen more in 2008 than the 7% it gained against the U.S. dollar last year. Chinese investors are deciding they would be better off with their money in simple bank accounts at home than holding a stock or bond denominated in U.S. dollars.

On the Internet in China, QDII is widely debated, but opinions are running almost uniformly against jumping in. "I'd like to say 95% of the QDII buyers will soon regret it," says a blogger nicknamed Pinocchio. "You see, the return of QDII must be over 10% before we could see a profit," the blogger concludes.

Analysts agree with the calculation, given views about the yuan's likely rise. In a bow to that sentiment, regulators recently announced QDII funds also will be able to hold part of their investment in domestic markets, which is meant to offset some of the risk.

Most of the QDII equity investment has so far been targeted at Hong Kong, which has been unappealing to Chinese investors as the city's market has been hit hard in the past six months by the U.S. subprime-mortgage concerns, sympathy with China's own slippery stocks and delays in a QDII-related program that would allow Chinese investors to pick their own stocks rather than buy mutual funds.

The U.S. also is starting to see QDII cash, along with markets like Mexico, Sweden and the U.K. A $3.7 billion pan-Asia fund co-managed by J.P. Morgan & Co. in Shanghai, for instance, reported that about $357 million, or 9.7%, of its stock investment on Dec. 31 was in the U.S. That was largely U.S.-traded American depositary receipts, including those of ICICI Bank Ltd. and Reliance Industries Ltd., both of India, plus Posco of South Korea.

Many of the QDII products are targeted at wealthy investors.

Despite his long-term optimism for the trend, Mr. Alexander of Z-Ben Advisors says it is natural to expect China's investors to move cautiously into overseas investing. "You could say the same thing about the U.S.," says Mr. Alexander. "It's called home bias."